Sony Computer Entertainment back in black

Sales of 4.9 million PS3s, 5.76 million PSPs give once-ailing game division record quarterly earnings of over $5 billion; analysts remain skeptical.

Three months after posting an $841 million operating loss for its second fiscal quarter, Sony Computer Entertainment Inc. is back in the black. Today as part of its overall earnings report, Sony reported that its game division posted a profit during its third fiscal quarter, which ended on December 31, 2007. SCEI posted a ¥12.9 billion (around $121 million at today's exchange rate) profit on ¥581 billion ($5.45 billion) in revenue for the three-month period, up from a ¥54.2 billion ($508.9 million) loss on ¥442.8 billion ($4.16 billion) the year before.

SCEI's resurgence was in large part due to the PlayStation 3. Though the console's development and production costs had been draining Sony's coffers since 2006, the company now reports "a significant decrease in the operating losses of the PS3 business as a result of successful PS3 hardware cost reductions."

As a result, Sony made money on many of the 4.9 million PlayStation 3s it sold worldwide during the quarter, an increase of 3.24 million units from the same period the year prior, when the console launched in November. PS3 software was also up, rising 20.7 million units to 26.0 million units.

Unfortunately, the robust figures didn't keep the company from lowering its oft-vaunted 11 million-unit annual PS3 goal to 9.5 million. However, even that new figure wasn't enough for some analysts. "Sony had forecast 11 million units, while we forecasted 8.5 million units," said Pacific Crest Securities' Evan Wilson in a note this morning. "While Sony is confident in its new forecast...we remain skeptical of its target."

Today's report also touted the PlayStation Portable, which saw sales rise 1.05 million units year over year to hit 5.76 million for the quarter. As a result, Sony raised its sales estimate by 30 percent to 13 million for the year. The grass on the software side was not greener, however: The 18.3 million PSP games sold during the quarter were 3 million fewer than were sold than a year ago.

Unsurprisingly, Sony spun its Q3 numbers as the first of many profitable earnings reports. Wilson, though, still thinks the PS3 is not living up to its potential. "Sony appears to be trading the long-term success of the PS3 for a near-term profit," he said. "It is possible that it could meet its reduced target of 9.5 million PS3 unit shipments as retailers ramp inventory in fiscal Q4 (March) for the anticipated releases of Grand Theft Auto IV (April 29) and Metal Gear Solid 4 (June). However, we continue to believe that the primary barrier for PS3 is price, and until the console reaches a mass-market price point, its sales will struggle." Currently, the 40GB PS3 is $399 in the US, with the reportedly discontinued 80GB model selling for $499.

393 Comments

  • fauljosh

    Posted Jan 31, 2008 5:00 pm PT

    Lower the price to $399 and include backwards compatibility and I'll buy one.

  • ivanfred

    Posted Jan 31, 2008 4:59 pm PT

    I am glad that Sony's gaming division is in the black. The last thing that I want is the death of the PS3. I love my 60 gig.

  • Phantom_2

    Posted Jan 31, 2008 4:59 pm PT

    we might see a new xbox with a blu-ray sooner or later. if u dont know this, nintendo took out ALOT of hardware and things out of the wii inorder to make it cheap. i think this system is meant to last a lot longer than the other systems.

  • Ahsan_Jadi_1

    Posted Jan 31, 2008 4:51 pm PT

    I believe you NDegree you are right.

  • JusticeKnight33

    Posted Jan 31, 2008 4:47 pm PT

    360 has no good exclusives in 2008, except for ninja gaiden 2, i own a 360 and a ps3 and i see that the ps3 will have the better year. Its not fanboyism, its the truth. Even from me, a 360 fan, 2008 is the PS3's year.

  • Bloodlust007

    Posted Jan 31, 2008 4:46 pm PT

    Are the final fantasy series and mgs series all you going to depend on, ps3?

  • NDegree

    Posted Jan 31, 2008 4:45 pm PT

    Believe me I just bought PS3 yesterday with Ninja Gaiden Sigma & my friends say that I just waste my money. I can't tell you a full detail because its just I am totally so sick of this Console War topic. But now reading this I think I took a right decision. So thumbs up & welcome back Sony

  • drangel_jam

    Posted Jan 31, 2008 4:42 pm PT

    They will eventually bounce back once the GTA4, GT4, MGS4, Tekken6, come out. oh, and FF13, but by then the PS3 will be in great shape already.

  • rocoswav

    Posted Jan 31, 2008 4:42 pm PT

    Sony will always be on top nuff said

  • carljohnson3456 posted Jan 31, 2008 4:41 pm PT (does not meet display criteria. sign in to show)

    carljohnson3456

    Posted Jan 31, 2008 4:41 pm PT (hide)

    "Spartan1017 carljohnson3456,
    yes i have played uncharted, but to be fare, i have only played only the demo.
    and no i won't be claiming victory if mgs4 comes the 360. i hate mgs, i'm a hitman/splinter cell fan thank you very much."

    Well good, because that's all the 360 is getting.

  • Severe_Gamer

    Posted Jan 31, 2008 4:40 pm PT

    IsmirZone... gotta ask... what exclusives? I can think of one in the next year that will be good: Ninja Gaiden II. You got any more? The 360 doesn't have very many good exclusives in its line-up currently (though if you don't have a PC I can see a better argument for it, I conceed). I could rattle off a dozen PS3 exclusives that have either come out or are coming out that will beat any dozen you can think of for 360...

    Of course, you'll probably accuse me of nonsense if I don't go first, so: Uncharted, Resistsance, Heavenly Sword, Little Big Planet, Killzone 2, Haze, Gran Turismo, Final Fantasy XIII, Metal Gear 4, Eye of Judgment, God of War 3, Motorstorm, Wipeout, White Knight Chronicles, and Ratchet and Clank. Sorry... got carried away... that's 15... and I can't buy them on my PC either!!! OK, now the 360's fan's turn!!!

  • athenian29

    Posted Jan 31, 2008 4:35 pm PT

    "We continue to believe that the primary barrier for PS3 is price, and until the console reaches a mass-market price point, it's sales will [continue to] struggle."

    Bull crap. PS3 is on the same price level as Xbox 360, and if Sony keeps up it's current stream of improvements, it won't be long until PS3 flies right by Microsoft's "front runner" ('course, it doesn't matter much since the Wii is still blowing the pants off MS and Sony without even lifting a finger).

    I personally think that all the consoles are fantastic. Each does spectacular at what it goes out to do. Nintendo's Wii is the perfect family machine, and has drawn outsiders into the industry like nothing before. Putting it in perspective, the Wii is like a super-cute compact car with an incredibly cool new feature that can put a smile on anyone's face. The Xbox 360 is a very capable mid-range machine that has it's fair share of mature AND kid-friendly titles, while still remaining orthodox. Think of the Xbox 360 as a mid-range sedan. It's also good for most things, but might not have to stand out to impress. Finally, we have the PS3, which is best for those with a lot of money and/or absolutely no life outside of gaming (but don't like WoW). The PS3 is the video game equivalent of a Lamborghini, Porsche, Ferrari, etc. Pricey, but top-of-the-line in nearly all respects and nearly impossible to get full juice out of (legally, anyway .

    Now that I have used a comparison between automobiles and video games to show why every console is good for something (if not for everyone), this should shut up a few fanboys for a day or two. Carry on.

  • theone332

    Posted Jan 31, 2008 4:34 pm PT

    this is a bad title for this "back in black", sounds like some negative news

  • console-deity

    Posted Jan 31, 2008 4:33 pm PT

    @vercetti_dude2 what are you talking about the BSs have always been praised for their controllers!?! I never could stand them, and Xbox360's has been praised as the most comfortable controller to date, then the WiiMote gets points for novelty and working really well for some games.

  • Spartan1017

    Posted Jan 31, 2008 4:32 pm PT

    carljohnson3456,
    yes i have played uncharted, but to be fare, i have only played only the demo.
    and no i won't be claiming victory if mgs4 comes the 360. i hate mgs, i'm a hitman/splinter cell fan thank you very much.

  • ScreamDream

    Posted Jan 31, 2008 4:28 pm PT

    This is good news.

  • IsmirZone

    Posted Jan 31, 2008 4:26 pm PT

    Pirateogta - You are right but as much you are wrong. There are syill games for the PS3 to come out and it is only early in the year. If by fall things look the same for the PS3 then I'd be worried. The main problem for PS3 is that it no longer is the system for exclusive games. For that Sony will need to work hard and suffer for it. Just as Nintendo and Microsoft did. Analysts need to say something in order to get paid. Like CNN for example.

  • vercetti_dude2

    Posted Jan 31, 2008 4:26 pm PT

    grognard, please re-read the article yourself.

    "SCEI's resurgence was in large part due to the PlayStation 3. Though the console's development and production costs had been draining Sony's coffers since 2006, the company now reports "a significant decrease in the operating losses of the PS3 business as a result of successful PS3 hardware cost reductions."

  • vercetti_dude2

    Posted Jan 31, 2008 4:25 pm PT

    Pirateogta, while Gears of War and Halo are indeed amazing games...I fail to see how the release of one would trump PS3's '08 lineup of MGS4, GTA4, and FFXIII; long-established series of quality that can be said to be the games that will throw PS3 back into the game from its former depression.

  • grognard

    Posted Jan 31, 2008 4:24 pm PT

    Reread the article people. PS3 is still losing money - just not as much as before. The profit is from PS2 and PSP, not PS3. The reduced target number is particularly bad for Sony considering they probably won't even hit that. I wonder if any journalists are going to follow-up on Sony's earlier assertion that they'd have 380 PS3 titles by March 1, 2008.... They are as likely to hit that sales figure as they are likely to hit that many games by next month.

  • vercetti_dude2

    Posted Jan 31, 2008 4:22 pm PT

    MGS4 is not even coming out on 360, Kojima said so himself. As for Blu-Ray, it is slowly gaining popularity and support; while the battle is far from over it now has a sizeable advantage. The 360 does not necessarily have better controls than the PS3, it depends on the game itself. If you are speaking controller-wise, Sony has always been praised for its controller design so it is in fact superior. While the PS3 is still slow at current, it will pick up its pace as the development costs continue to decrease. That will not make it suddenly surge forward, but will definitely put it on even grounds with the 360 and perhaps the Wii. Indeed It has some ways to go, but to condemn it like a fanboy is purely ignorant.

  • natethemighty

    Posted Jan 31, 2008 4:21 pm PT

    I am so glad to have a ps3. 08 is going to be groundbreaking in terms of great gaming. PS3 is the future of gaming, are you part of it?

  • Pirateogta posted Jan 31, 2008 4:19 pm PT (does not meet display criteria. sign in to show)

    Pirateogta

    Posted Jan 31, 2008 4:19 pm PT (hide)

    poopdogg89: "TKandPBC, that excuse doesn't fly anymore. There are lots of good games available for the PS3. I could list them, but you already know what they are."

    The PS3 may have good games, but it has no great games like the Wii and 360. (Super Mario Galaxy, Halo 3, Gears of War, Metroid Prime 3, Bioshock, etc.) The PS3 games lineup doesn't stand a chance against those games. Now you can boast about the PS3's '08 lineup, but most of the 360's big '08 games have not been announced yet. And if Gears of War 2 is released in '08, which it most likely will be), then the PS3 is once again screwed in the games department.

  • jeffokiecorry2

    Posted Jan 31, 2008 4:18 pm PT

    Sony can have my money the same time Square-Enix gets it for FFXIII. Unless they convince me sooner. Our cash is too precious to buy every game that's pumped out. Wii and PS2 keep me happy for now. Xbox is pretty neat, but I won't buy one. I am a long NIntendo fan...and won't forget the sell-out of FFVII...but when Sony publishes the best games that's where I'll be. (With my Wii in tow...just for the "casual" Galaxy, Prime 3, Zelda, SSBB, Crystal Chronicles, Virtual Console experience.) If I want the game I buy the System...not buy the system then hope the games come.
    Convince me Sony.

  • carljohnson3456

    Posted Jan 31, 2008 4:16 pm PT

    "Spartan1017 carljohnson3456,
    just because uncharted and gears have similar control schemes, does not mean they play similar.
    and wow, lost planet is coming out on the ps3 almost a year and a half after it came out on the 360! woopty flippin' do!"

    Yes, a duck-cover and shooting system makes the game play very similar. You havent even played Uncharted, have you?

    And I'll remember that "woopty flippin' do" when MGS4 comes out on the 360 a year and half after it hits the PS3... when I'm sure you'll be claiming victory.

  • bigjsd

    Posted Jan 31, 2008 4:16 pm PT

    I have zero need for a PS3 for games. The 360 has every game I personally desire. If it were to drop in price to $200.00, and Blu-Ray was to win support of ALL the major studios I may consider it as a BD player. Seriously though by the time BD were to become an accepted standard there will be stand alone players cheaper and Microsoft and Nintendo will be releasing their next gen hardware. The PS2 ruled the roost but the PS3 is merely chicken feed.

  • Captainintendo

    Posted Jan 31, 2008 4:15 pm PT

    "take out the blu-ray drive."

    That would be extremely stupid considering that everyone is switching from HD-DVD to Blue Ray

  • console-deity posted Jan 31, 2008 4:14 pm PT (does not meet display criteria. sign in to show)

    console-deity

    Posted Jan 31, 2008 4:14 pm PT (hide)

    Flogging a dead horse wont make it live. BS3 has crap titles and anything multi-platform is always better on 360 (better controls/controllers and achievement points).

  • akuya32

    Posted Jan 31, 2008 4:13 pm PT

    As I always say, Gamers Game Fanboys Pick Sides... Its good that Sony is starting to tell its system and its good for real gamers across the board. If your a fan of just one or another for one stupid reason or another then I almost feel sorry for you. All systems out on the market has enough going for them to keep gamers happy. Soo SOny fanboys, 360 fanboys and will fanboys who only stick by their system really can't call themselves gamers cause true gamers want to play no matter what system pops out as long as good games keep coming out which it is no matter what one may think or say.

  • AgentA-Mi6

    Posted Jan 31, 2008 4:12 pm PT

    Get out the Blu Ray Drive :lo:
    Good Idea Triton ...

  • poopdogg89

    Posted Jan 31, 2008 4:10 pm PT

    TKandPBC, that excuse doesn't fly anymore. There are lots of good games available for the PS3. I could list them, but you already know what they are.

  • lilmp89

    Posted Jan 31, 2008 4:07 pm PT

    For Sony and any company, they HAVE to have that sales goal too high. To cave in to skeptics is to admit there is little confidence in the product's potential. The PS3 has got plenty of it, but it's not being fully exploited. But, it's just my opinion =]

  • Spartan1017

    Posted Jan 31, 2008 4:01 pm PT

    carljohnson3456,
    just because uncharted and gears have similar control schemes, does not mean they play similar.
    and wow, lost planet is coming out on the ps3 almost a year and a half after it came out on the 360! woopty flippin' do!

  • TKandPBC

    Posted Jan 31, 2008 4:00 pm PT

    Games games games, Sony! There's just simply no incentive for me to buy a PS3 until MGS4 comes out. However, even then, it's still too much to drop for one game (two if you include MLB the show 0. The thing that would really get me to buy a PS3 is the Emotion engine. Put that back in, and I'll buy a PS3 in a heartbeat.

  • Severe_Gamer

    Posted Jan 31, 2008 4:00 pm PT

    Spartan1017. Others have already responded to your post, but allow me to as well. You list alot of games. Allow me to explain why I didn't mention them in my post in the order you listed them: graw(graw 2 is on PS3), crackdown (only for for 2 hours at most), lost planet(terrible, just terrible), frontlines(could be good, time will tell), splinter cell conviction(this will probably be good... but it sure ain't a shooter), double agent(yeah... uh... still not a shooter), saints row(sequel going multiplatform), pdz(I'm not going to dignify this with a real response), or mass effect(yes, a very good game... but really weak shooting mechanics).

    I was trying to do you 360 fans a favor by not mentioning most of the junk on your system and only comparing good games to good games (not too mention shooter to shooter) but you just wouldn't let me get away with it.

    Finally, for those who haven't played Uncharted, it uses a cover system with very similar mechanics to Gears of War. Most people seem to think it is Tomb Raider (and I can see why people would make that assumption), but it is basically Gears of War with a better story, better characters, better graphics and MUCH better AI. Though it still gets props for 2P Co-op.

    Anyone else besides Spartan1017 wanna throw some ignorance on the table?

  • carljohnson3456

    Posted Jan 31, 2008 3:59 pm PT

    "spencdiamonds carljohnson3456 Spartan1017 severe_gamer and all others WOW like really WOW the Xbox 360 is way better than 360 the games for the PS3 are crap the shooter are crap the 360 has alot more excusives and alot more shooters to choose from like really get a life Resistance was good but **** no online co-op and Multiplayer than is less than impressive...would go further but seeing the PS3 R2 and L2 buttons prove enough that it is not fit for shooters."

    That was so gramatically terrible I'm not even going to take it seriously.

  • Spyhunter_101

    Posted Jan 31, 2008 3:59 pm PT

    its not wishful thinking if you read what i said you would not think that

  • hilltops

    Posted Jan 31, 2008 3:56 pm PT

    Spyhunter_101 mgs4 gets ported to the xbox 360 i dont think ill be getting 1 any time soon

    thats the most wishful thinking i have ever read!!

  • Yodax007 posted Jan 31, 2008 3:56 pm PT (does not meet display criteria. sign in to show)

    Yodax007

    Posted Jan 31, 2008 3:56 pm PT (hide)

    BVCX, thats very interesting, because at my school of 2,500 kids almost noone got a ps3 for christmas. Everyone got a wii or a 360. Maybe my area is wierd, or maybe we just all have better taste. I'll let you figure it out.

  • breakitapart

    Posted Jan 31, 2008 3:54 pm PT

    ok, Sony, you are doing well--NOW MAKE SOME EFFING GAMES!!!! make killer games that I cannot get on any other system- I have to wait until 2009 for GOW3 and FFXIII has yet a release date--let me count thy ways....

  • terminator246

    Posted Jan 31, 2008 3:54 pm PT

    PS3

  • spencdiamonds posted Jan 31, 2008 3:50 pm PT (does not meet display criteria. sign in to show)

    spencdiamonds

    Posted Jan 31, 2008 3:50 pm PT (hide)

    carljohnson3456 Spartan1017 severe_gamer and all others WOW like really WOW the Xbox 360 is way better than 360 the games for the PS3 are crap the shooter are crap the 360 has alot more excusives and alot more shooters to choose from like really get a life Resistance was good but **** no online co-op and Multiplayer than is less than impressive...would go further but seeing the PS3 R2 and L2 buttons prove enough that it is not fit for shooters.

  • footfoe2

    Posted Jan 31, 2008 3:48 pm PT

    horray. no use that money to get games out ON TIME!!!! get the big games FF13 lil big planet, killzone 2, MGS4, and other games that escape my mind by Q4 08 plz no more delays! k cool go ps3. and kratospete get a job sorry you got to go next gen at some point.

  • mastertimx

    Posted Jan 31, 2008 3:45 pm PT

    the ps3 is getting many great games this year, and if you don't get one then i pity you. i have all 3 so i'm good although my second breakbox 360 is crapping out on me.

  • GrimBee

    Posted Jan 31, 2008 3:43 pm PT

    By the time the ps3 gets on its feet and developers start using every resource up inside the ps3 - the wii and the 360 will begin to have funerals and their new consoles will come out.

    This generation moves fast. We may not see a new xbox or Nintendo console for a good few years yet, but by the time we do - the ps3 would of gone through several hardware revisions and outer re-designs (like every other sony console) that people will eventually begin to see that the one console you buy on launch day will not be the same when the console ends its life.

    The 360 has had several changes to it, so has the ps3 (even the ds and psp).
    In a year or two we shall probably be seeing slim ps3's or something, or 360's that are quiet! (lol).

    My point being - to be in the "next gen" business, you need to cut a loss. Its just how its done.

    Microsofts plan was to invest in an early start, and then reap the rewards from software sales. And boy do they reap those rewards. And they make money on the hardware. Not bad.

    Nintendo have totally profited from day one, and sell just as much software as M$ (more if you count the DS aswell).

    Sony have not really concentrated on one thing at a time, they went all in with their fingers aimed at as many pies as possible. From media centre to blu-ray to UMD to even having things like GPS and Skype on psp...
    etc etc.
    Sony have fantastic ideas, but there isn't enough time to execute all of them at once.

    Sony has alot of cool things to dish out for the next few years. Its not going to be like their Ps2 success, but this generation is very different from the last. And just as microsoft had a loss in their first year - when gears of war kicked off - microsoft sold 4 million copies of gears in just a few months..

    Sony needs their big IP's to come out asap, and THEN concentrate on all that blu-ray stuff...
    But then, this is how Sony are getting their money - royalties. They took BC out because they want to stay afloat with the ps2 and its own catalogue of games.
    If they were relying on ps3 to run their ps2 library - people will be miffed when their game doesn't work properly via emulation..

    As I said, Sony have dabbled too much in the media stuff. Which is why their game-side is slower than usual (and slower than the competition).
    Where Microsoft profit from xbox live and software, where Nintendo profit from online purchases, hardware and software sales - Sony will profit in blu-ray.
    Setting the ground with the ps3 will eventually pay off for them. But imo its a shame that it hasn't quite kicked off with a bang for the ps3.

    Yet!

  • BVCX

    Posted Jan 31, 2008 3:43 pm PT

    Wonder where the xbots went? Oh yeah! to ps3. Most of my friends has resently got a ps3 or planning to get one over 360. If the ps3 was realeased at the same year and price as the 360, I dont think the 360 would have live.

  • donmega1

    Posted Jan 31, 2008 3:43 pm PT

    weather you nerds like it or not people are getting into the HD era and buying ps3's for the Blue Ray drive.....HD DVD is on its way out...look it up........i even read where xbox might have to switch to blue ray if the HD DVD format dies...... hey.. that would be cool because i would buy one. sucks for Microsoft though...having to pay sony for their technology....lol.

  • stevenk4k5

    Posted Jan 31, 2008 3:36 pm PT

    Wow, they really bounced back! Have to give credit where credit is due, they did very well. Maybe this will give them incentive to publish better PSP games and get me to buy another PSP.

  • akiwak

    Posted Jan 31, 2008 3:35 pm PT

    THANK YOU!!!!!!!!!!!!!!!!!!

    ZELERO

    Game on!

  • redskinStu

    Posted Jan 31, 2008 3:35 pm PT

    Why would the "experts" be skeptical?
    There is no Xbox in Japan, and that's Sony's bread and butter. When the big titiles come out, MGS4, FF etc., they won't be coming out on the Wii.
    Also, HD-DVD is done, with a fork in it.

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